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Was the Obamacare Panic Overblown?

UnitedHealth Group  (NYSE: UNH  ) has decided to expand its footprint in the Obamacare exchanges -- from five states to at least seven so far. WellPoint  (NYSE: ANTM  ) raised its profit guidance for this year based on strong Obamacare enrollment. Molina  (NYSE: MOH  ) requested a 7% decline in the premiums it charges when the company submitted its suggested rates to the Washington state insurance commissioner.

While the information we have is incomplete (it's still early), it looks like things may actually be going better than expected. WellPoint's aggressive push to get new members through the exchanges appears to be paying off for the company, and UnitedHealth Group executives seem to have taken notice, as the company is reportedly expanding its Obamacare exchange operations into at least Washington state and Indiana. And Molina's requested cheaper premiums helped drag down the requested average premium increase in Washington to the lowest level in seven years.

Interesting news for consumers (especially the Molina news in Washington!), but what about investors? What are the benefits to expanding into more Obamacare exchanges in year two of the law's full implementation?

In this video, from Market Checkup, the Motley Fool's health care-focused investing show, health care analysts Michael Douglass and David Williamson discuss the latest Obamacare news and what investors should watch for in the coming weeks as more information -- including more complete premium rate increase data -- becomes available.

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Read/Post Comments (21) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 25, 2014, at 11:04 AM, Gr8BigBoom wrote:

    I think it's still to early to tell the results. What I do think, long-term, the program will fail.

    The goal of the program if I am not mistaken was to get my generation (age 25-35) to enter the program to counter the massive expenses that the VERY unhealthy babyboomers (country trasher gen) will incur on all of us very soon. If we are looking at the program from the aspect of target audience, it failed completely. I didn't signup and will continue to pay the fee/fine/tax regardless. I won't pay for the babybumbs!

    What the program did get is numbers, numbers of super unhealthy, old, babyboomers that will use every penny they can because they are already so unhealthy and have a crazy amount of health problems with a complete lack of care for ones own health.

    So yes, congrats O'boy, you got the numbers but the target audience didn't hear a thing. Now you have a massive amount of unhealthy old people on a goverment program and trust me, trust me, they will use every cent plus some.

    I have said it a million times, the babyboomer generation is the worste thing to ever happen to this country. PERIOD!...

  • Report this Comment On May 25, 2014, at 11:06 AM, davidki3794 wrote:

    With the announcement that the Obama Administration has just again sweetened the pot for Insurance their bottom line won't get hit as a company that didn't get billions of dollars from the USA Taxpayers. It is amazing how we the taxpayers continue to bail out Obama's dreams! As for Stocks and and investment what will the outcome become once the "Taxpayer Bailouts" end?

    No doubt the pro Omabacare press will wet their pants over this news.... but, how much will it really cost the taxpayers in backstop pay for the Insurance Companies..... Will Molina accept any of the provided backstop funds? Will all this show up in the annual reports next year.. that will be interesting to watch...

  • Report this Comment On May 25, 2014, at 11:39 AM, rgraspy wrote:

    The fool here is anyone that thinks this failed plan will ever work..Obama care is the biggest scam ever put to the american people..75 to 80 percent of the people Obama brags about already were insured,this just another Obama money hole and will totally kill the medical system in the USA..

  • Report this Comment On May 25, 2014, at 11:40 AM, DonkeyTDong wrote:

    The answer is: ABSOLUTELY NOT. There is No Way to Overblow concerns as to this program and its effects.

  • Report this Comment On May 25, 2014, at 11:41 AM, ernaldo wrote:

    Obamacare is a disaster, and will eliminate itself in the near future. Simply, there are too many in the boat, and not enough people rowing.

  • Report this Comment On May 25, 2014, at 1:38 PM, mperiod wrote:

    @ Gr8BigBoom

    The problem with your comment is you say "If we are looking at the program from the aspect of target audience, it failed completely." which is the exact opposite of the data being released by most insurance companies ranging from places like e-heaht insurance who was contracted to sell exchange plans (who had almost 50% of new sign ups in the target range, which is slightly inflated because they have a normally above average percentage of young sign ups) but also the data released by private insurance companies are showing most hit and exceeded their projections of the "young and health".

    YOU chose not to sign up, so now you pay a fee AND don't have health insurance, so if you get sick you'll be paying even more. You're making the mistake in thinking that the vast majority of people were as short sighted as you.

  • Report this Comment On May 25, 2014, at 1:40 PM, mperiod wrote:


    Even Republicnas who are campaigning against Obamacare disagree with you, its already self suficient, the rates that have come in for next years premiums are below the normal increase, the rates this year were below average cost wise on the individual market place. You've had the largest decrease in the uninsured ever. From Ted Cruz to John Boehner they've all said they don't expect the law to fail and that repeal is all but off the table at this point, because yo'd be taking away insurance from around 17 million Americans.

  • Report this Comment On May 25, 2014, at 2:45 PM, angelsgiggle wrote:

    I came out very good with the Obamacare. My rates are half as much (from $630 to $284) and my deductible is lower (from $5000 to $1750). My copay to see the doctor was $35 and now is $5.

    As we get sicker and sicker....sooner and sooner, the food is poisoned with chemicals, the meat is poisoned with chemicals....younger and younger people develop life ending diseases much sooner. Many more from birth to 5yrs old are sicker.

    How could anyone say young people don't need insurance. Younger people need to be responsible and obtain as much health insurance as they can for them and their children. They are forced to carry car insurance and now they had to be forced to get health care.

    Big deal.

  • Report this Comment On May 25, 2014, at 6:04 PM, bamissfa wrote:

    MF is a shill for obama i've noticed

  • Report this Comment On May 25, 2014, at 6:05 PM, bamissfa wrote:

    those of you who got reduced deductibles and premiums bully for you but for the rest of us that didn't happen. so we don't like obamacare because it shifts YOUR costs to other people it's what obama himself callign spreading the wealth around

    screw you get off your butt and WORK for what you get.

  • Report this Comment On May 25, 2014, at 6:18 PM, Repulski wrote:

    This law cannot be judged until the employer mandate is implemented and we see how many big employers dump their employees on the exchanges.

  • Report this Comment On May 25, 2014, at 8:05 PM, RFTECH3000 wrote:

    @ mperiod

    Where do you get 17M from ? the WH propaganda machine ?

    you cant count the ones who already had insurance and just got shuffled around from one insurance to another , only the ones who were previously uninsured count !

    And kindly post some links to the statements of boehner and cruz as well as some sound data to prove your claim that rates have come down and obamacare supposedly is self sufficient ? and dont bother with progressive propaganda or WH sites !

  • Report this Comment On May 25, 2014, at 8:08 PM, RFTECH3000 wrote:

    of course the law is a winner for the insurance companies , they can finally maximize their profits by cutting back the size of their networks and jacking up rates !

    It was always understood that insurance companies would keep their rates low at first to attract customers and then later on jack them up , its the old game companies are playing with "introductory offers " for a long time !

  • Report this Comment On May 25, 2014, at 8:10 PM, RFTECH3000 wrote:

    I think it was the molina CEO who said that consumers need to break the habit of choice if it comes to insurance , obviously their ultra slim exchange networks are paying off for them.

  • Report this Comment On May 25, 2014, at 8:15 PM, RFTECH3000 wrote:

    8M enrolled in the exchanges and 3M in medicaid expansion , thats 11M people but lets not forget that the majority of them just got shuffled around between insurance carriers , so you are going to have insurance companies who got new enrolled who were with other carriers before and carriers who are losing money because they either lost to medicaid or other insurance companies or they have more sick people than anticipated .

    The picture painted in this article is incomplete and hence inconclusive as it only reflects 3 insurance companies

  • Report this Comment On May 25, 2014, at 8:22 PM, RFTECH3000 wrote:

    yeah the insurance companies are happy , as far as the consumers concerns they are not !

    Recent surveys for the first time show that 48% now favor a full repeal, 32% want the law changed and 16% want to keep it as is , this is reversed from earlier surveys where 48% wanted to keep the law but with changes , so it looks like people are really happy - NOT !

    Another Survey taken amongst people who enrolled or changed coverage in the open enrollment period shows that 64% are unhappy with their coverage , 75% of the 64% answered that their doctor or hospital is no longer covered, 15% stated that the out of pocket cost for their medications are much higher than before and 10% criticize a much higher deductible

  • Report this Comment On May 25, 2014, at 8:36 PM, RFTECH3000 wrote:

    my sons fiancee has a chronic illness that requires medication , and hospital visits every 3 months, under her old plan she paid $25 out of pocket for a 90 day supply, her plan cost was $525 a month with a $5000 deductible , now for her exchange plan she pays $175 after subsidies and her deductible is only $2500 so she was very happy at first but now there are several issues, the first one is that altough the deductible is lower it now has to be met for office visits before the insurance pays for in network visits, issue # 2 is that the copay for her medications are $275 for a 90 day refill and obviously dont count towards the deductible , she called the insurance and they say that in fact only $25 of the $275 are counted towards the deductible.

    The biggest issue though is that the hospital she has to go to is not in network for the insurance, because of this she has to pay out of pocket for each visit and then send in for reimbursement to the insurance but for out of network the deductible is $5000 and not $2500 and the insurance then only pays 70% and not 80% and the deductible does not apply towards the $5000 out of pocket maximium of the policy !

    Her only alternative would be to either go to a hospital in dallas which is 70 miles away or to switch to another plan , she talked to the insurance and they told her that she will have to get a non exchange plan but this plan will cost her $1250 a month with a $500 deductible or $795 for a $2500 deductible !

    So either way it looks like she is screwed

  • Report this Comment On May 26, 2014, at 9:23 AM, RightMan2020 wrote:

    I ask those who don't like the Obama Care Program / Law to come up with a viable alternative. In stead of the constant complaint about what is wrong, simply tell me what can be used to replace the law. We are not going to throw the 8 million people who signed up for Obama Care into the street. N or are we going to sit by and let 250,000 un-insured people use the ER rooms across this country as they did prior to Obama Care, which eventually will break the system, do that again. We cannot let people with pre-existing conditions get sicker as they have no where to turn for any sort of health care. Answers are needed not a Fox News fear pandering report which serves no purpose but to bring out those who hate Obama

  • Report this Comment On May 26, 2014, at 9:30 AM, RightMan2020 wrote:

    7 out of 10 bankruptcies filed in 2011 were for medical bills. 7 people who had no way to pay a massive health care debt had to file bankruptcy in 2011. Something had to be done. Yet no one had an answer. When a health care plan cost a family of 5 almost $1000 a month we had a problem. When we saw how people were denied health acre coverage for something as simple as having ADHA, or children with Autism, we had a problem. When we saw how the CEO's of 3 health care companies received over $11,000,000 in bonuses in 2012, while they rejected over 300,000 applicants that same year, we had a problem. If you can't grasp the idea of how the ACA law makes your health care provider spend more of your monthly premium on YOU and not on a huge bonus for its CEO, you have a problem.

  • Report this Comment On May 26, 2014, at 9:37 AM, RightMan2020 wrote:

    $69 a month, That's what a person (One Individual) who pays who makes less than $35,000 a year will pay for Obama Care. The deductible is about $5,000. In 2010 the same plan cost $375.00 a month. These are the facts, if you doubt it simply go to the web site and check it out. Instead of echoing Fox News and Rush Limbaugh all day, check out the facts, come up with a viable alternative but do more than talk and tow the Republican / Fox News fear pandering line.

  • Report this Comment On May 26, 2014, at 12:31 PM, ugo wrote:

    Overblown? Are you that gullible to the lame stream media? Not only did my neighbors nephew's premium go from 150 a month to 3,200 a month for worse coverage, my wife's friend's handicapped child just got his notice in the mail last week to appear in front of the death squads to plead for his life June 17th.

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Michael Douglass

As the Motley Fool's Health Care Editor/Analyst, I focus on all things health care -- although my greatest interest is in the megatrends reshaping the American health care system, including the Affordable Care Act, Accountable Care Organizations, a shifting regulatory landscape, and the new drug discoveries fundamentally changing disease management and treatment.

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